We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Crystal International Group Limited (HKG:2232), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.

See our latest analysis for Crystal International Group

Crystal International Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Vice Chairman Choy Yuk Ching Yvonne Lo bought HK$11m worth of shares at a price of HK$0.01 per share. We do like to see buying, but this purchase was made at well below the current price of HK$3.15. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Crystal International Group insiders bought shares last year, they didn't sell. They paid about HK$0.011 on average. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Crystal International Group Insiders Bought Stock Recently

It's good to see that Crystal International Group insiders have made notable investments in the company's shares. Vice Chairman Choy Yuk Ching Yvonne Lo spent US$2.7m on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Crystal International Group insiders own about HK$7.2b worth of shares (which is 81% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Crystal International Group Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Crystal International Group insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

But note: Crystal International Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.